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Last September I led a lively debate at the FT’s Weekend Festival. The topic was the culture and ethics of Uber, the ride-sharing company that has come to span so much of the world. Panellists and audience laid into the c*entreompany’s history of rule pushing and allegations of a toxic corporate culture.
Before too long an audience member with a sharp memory pointed out — with evident satisfaction — that the FT had named Uber’s founder and guiding spirit, Travis Kalanick, Person of the Year at its 2014 Boldness in Business awards. Surely the tut-tutting of the assembled FT columnists was prize hypocrisy?
Certainly not, I shot back. The award Kalanick received and, I believe, richly deserved was not for playing by every rule or for being a warm, cuddly person. He won for boldness, and his credentials on that front are undiminished. Uber’s combination of an innovative business model, new technology and a relentless drive into new markets have changed urban transport for ever. It has also blazed a path for other “sharing economy” companies. It has changed the regulation of taxis and may ultimately force changes to employment and tax law. And it has, I can say from personal experience, made it a whole lot easier to live in London.
Did the company’s disregard for regulators help it innovate? Was Uber’s lack of internal controls or “adult supervision” an inevitable byproduct of fast growth — growth needed to win the ride-sharing land grab? It is fascinating to consider, and hard to be sure.
The damage done to Uber’s business by its cowboy culture is, on the other hand, indisputable. If nothing else, Uber’s stumbles helped competitors such as Lyft take market share, and energised regulators that hold the company’s fate in their hands. Kalanick, quite rightly, lost his chief executive job. The question is whether a profitable and sustainable company emerges under the new leadership team.
Whatever you think of Kalanick, Uber’s story captures something fundamental about the Boldness in Business awards — and about business itself. On the night in March when the awards are given out, the nominees and the winners shine. Their strategies look wise and their leadership teams world-conquering.
Looking back across a decade of Boldness awards, many of the winners have gone on to prove the judges’ instincts correct. Most winners, however, have gone on to face terrific challenges. The reasons are clear enough. Boldness invites imitators, energises incumbents and attracts criticism. It involves calculated risks that do not always come good. When they do, managerial hubris becomes a risk in itself.
The point is this: boldness in business cannot happen only once. The modern economy makes competitive adjustments with astonishing speed. Innovative companies that do not reinvent themselves bequeath their good ideas to competitors and leave their investors counting losses.
Consider GoPro, which won the Smaller Company award for 2012. Its founder — a surfer — realised that there was a gap in the market for a small, durable, waterproof camera that took advantage of ever cheaper digital storage to capture sporting derring-do first-hand. At one point, soon after going public, the company’s market capitalisation approached $12bn. But imitators proliferated, revenue slipped, profits disappeared and the company — in the midst of an effort to reinvent itself — is now worth $800m. The tale of Groupon — the once high-flying deal website that won the 2010 Newcomer award winner — has a similar plot.
Resilience is a vital quality. Consider Tullow Oil, winner of the 2009 award for entrepreneurship. Its founder took a bold gamble on oil production in Africa and won big. But the big fall in oil prices in the past few years took its toll. Tullow spent most of 2015-2017 cleaning up its balance sheet. The company has survived, though, and this year is back to buying new exploration licences and its capital expenditure is expected to double.
Yes, there are apparent exceptions, companies that seem to go from strength to strength, such as Google and Amazon (2008 and 2011 winners, respectively). There are some leaders — like former Person of the Year Jamie Dimon — who cannot seem to put a foot wrong. The common theme among these seems to be size: as competitive and protean as it is, today’s economy does favour very large institutions. With any luck, however, this also will change.
This year’s winners will need to be ready to adapt and change, too. The fearless effort of Wheelys Café — charging into the premium coffee market with mobile stores and an entrepreneurial business model — will be tested by well-funded competitors. EthioChicken, a business with great potential to do good as well as earn a profit, will be tested by the commodities cycle.
The bigger companies will need to be nimble, too. James Dyson, our Person of the Year, may be facing his biggest challenge yet as his eponymous company pushes into the electric car market. Reliance Industries has placed a huge bet on a low-cost strategy in the Indian mobile telecoms markets, where profits have long been scarce.
Success is a process, not a destination. That is the biggest lesson of 10 years of Boldness in Business awards. The companies that have grown stronger after winning awards have in common resilience in the face of volatile markets, and an ability to try new approaches as old ones become obsolete. This is sure to be true in the next decade, too.